Caterpillar Stock Rating Upgraded as Tariff Concerns Ease
Caterpillar's stock rating has been upgraded to 'Buy' by Freedom Broker, a financial services firm. The upgrade is based on the company's assessment of new tariffs and their potential impact on Caterpillar's revenue.
Freedom Broker estimates that the pricing impact from retaliatory tariffs could amount to less than 0.2% of Caterpillar's revenue, equivalent to an upper bound of approximately $150 million annually.
The firm also noted that this tariff exposure represents a relatively modest headwind to Caterpillar's overall financial performance, with a possible increase in end-customer costs of no more than 0.5%. The company typically operates through independent dealers, who would likely bear the bulk of the financial burden if they are unable to pass on the additional costs.
The price target for Caterpillar has been set at $980 by Freedom Broker, based on a 2027 fiscal-year adjusted earnings per share estimate of $31.26 and an application of a target price-to-earnings multiple of 32 times.